Nigeria’s GDP growth rate slowed to 2.98% in Q1 2024, according to the National Bureau of Statistics (NBS). This rate is an improvement from the 2.31% recorded in Q1 2023 but lower than the 3.46% in Q4 2023. The growth was mainly driven by the services sector, which grew by 4.32% and contributed 58.04% to the aggregate GDP. Additionally, the agriculture sector saw slight growth of 0.18%, and the industry sector grew by 2.19%. Nigeria’s nominal GDP for the quarter was N58.8 trillion, up from N51.2 trillion in Q1 2023, showing a year-on-year nominal growth of 14.86%. Oil production averaged 1.57 million barrels per day, contributing 6.38% to the GDP, while the non-oil sector contributed 93.62%, slightly lower than in previous quarters. This mixed performance highlights the varying dynamics within Nigeria’s economy amid global and local economic conditions.
Money Market
Following FAAC inflow, system liquidity concluded the week at ₦170.43 billion long after being in a deficit for most part of the week. WoW, the Open Buy Back (OBB) rate and the Overnight (OVN) rate jumped 244ps and 232bps to print at 32.40% and 33.00%, consecutively.
We expect rates to hover around current levels.
Treasury Bills Market
The Treasury Bills market kicked off on a somber note with minimal activity on the long end of the curve ahead of the PMA and MPC decision. We saw the 10-Apr-25 bill bid at 20.45% and offered at 20.20% while the 8-May-25 bill traded 20.50/20.20. At the auction this week, while total subscription stood at ₦1.59 trillion, the DMO offered ₦508.98 billion and allotted ₦638.98 billion across the standard maturities with stop rates printing at 16.50%, 17.449% and 20.69%. This represents a 26bps and 44.9bps increase on the 91-day and 182-day bill and a marginal 1bp decline on the 364-day bill. We also witnessed the OMO auction where the CBN offered ₦500 billion across the standard maturities. A total of ₦1.158 trillion was sold while total subscription stood at ₦1.16 trillion with the stop rates closing at 18.9999% (+0.99bps), 19.74% (+26bps) and 22.49% (+99bps) respectively. Sequel to the auctions, we saw the 22-May-25 bill and 20-May-25 bill trade at 20.35% and 21.60%, respectively. Week-on-week analysis indicates a 4bps decline in the average benchmark yield, printing at 22.32%.
We expect a similar session.
FGN Bond Market
The FGN local bond Market traded on a muted note throughout the week. Activity was skewed to the new 2033 bond bid at 20.00% and offered at 19.91%. At the end of the MPC meeting, the committee voted to raise the MPR by 150bps to 26.25% from 24.75% while holding other parameters constant. We witnessed the new 10-year bond trade 19.89% on the bid and 19.74% on the offer. In addition, there were few cars on the long end of the curve, particularly the off-the-run 29-year bond with bids at 17.57% and the 49s bid at 17.95% while offers were far at 17.65%. WoW, the average benchmark yields slid 2bps, settling at 18.55%.
We expect a drab session.
FGN Eurobond Market
The FGN Eurobond market witnessed a bearish week on the back of hawkish comments from FED officials, FED minutes which highlighted willingness to tighten policy further over lack of progress on inflation. This week, the S&P Global Manufacturing and Services PMI improved to 50.9 and 54.8 from 50 and 51.30, surpassing estimates. Also, the Michigan Consumer Sentiment Index printed at 69.1 vs 67.5 estimate (67.4 prior). WoW, the average benchmark yields climbed 22bps, settling at 9.75%.
We expect the bearish trend to be sustained.
Currency Market
The value of the Naira to the dollar gained 97bps to print at ₦1482.81/$ this week at the Nigerian Autonomous Foreign Exchange Market Window.
Equities Market
At the closing bell, the Nigerian stock market experienced a disappointing week, marked by a 52bps dip WoW and a 37bps decline day-on-day in the benchmark NGX All-Share index, concluding at 97,612.51 points. Taking a more granular view, market cap declined by ₦0.20 trillion to ₦55.23 trillion while the year-to-date return settled at 30.54%. This negative trajectory was largely influenced by the price declines in the banking names, particularly Ecobank Transnational Inc (-9.98%), United Bank for Africa (-4.00%), Zenith Bank (-2.76%), and FirstBank Nigeria Holdings (-9.31%). In reflection of market stance, market breadth concluded at 0.47x which shows that 51 decliners outnumbered 24 advancers.
Trade metrics showed significant improvements with volume and value traded up by 446.34% and 67.14% to 769.09 million units and ₦15.74 billion, accordingly. Notably, Ecobank Transnational Inc and Access Corporation headlined the weekly volume and value chart, with trading volumes of 556.22 million units and 297.08 million units, valued at ₦12.04 billion and ₦5.02 billion, respectively.
We expect another negative session.
